Credit deflation and the reflation cycle to come (part 2)

[DurhamBorn]

Its starting 

https://www.ispreview.co.uk/index.php/2020/11/three-uk-and-vodafone-adopt-inflation-busting-price-hikes.html

CPI+3.9%

The industry will all follow suit and likely none will break ranks.

 

[Castlevania]

31 minutes ago, DurhamBorn said:

Its starting 

https://www.ispreview.co.uk/index.php/2020/11/three-uk-and-vodafone-adopt-inflation-busting-price-hikes.html

CPI+3.9%

The industry will all follow suit and likely none will break ranks.

 

Vodafone actually moved me to a new tariff. Same as the old one which they’re discontinuing but I now get unlimited data. I saved £0.20 a month.

[Democorruptcy]

11 minutes ago, Castlevania said:

Vodafone actually moved me to a new tariff. Same as the old one which they’re discontinuing but I now get unlimited data. I saved £0.20 a month.

I'm going to complain to them about it. It's off thread message.

[Yellow_Reduced_Sticker]

15 hours ago, Yellow_Reduced_Sticker said:

 

Meanwhile back at the ranch...

 

Bank of England set to inject £100bn into faltering UK economy:

 

 

WRONG!

 

They have INCREASED it by a mere...£50bn!

 

The decision was voted through unanimously by the 9-person MPC.

 

"Bank of England to pump another £150bn into UK economy"

https://uk.finance.yahoo.com/news/coronavirus-uk-interest-rates-bank-of-england-november-mpc-meeting-070710497.html

 

As the theme of this thread...Music to our ear-holes!

[DoINeedOne]

China has nearly 250 gigawatts (GW) of coal-fired power now under development, more than the entire coal power capacity of the United States. 

Our Chinese friends now have 97.8 GW of coal-fired power under construction, and another 151.8 GW at the planning stage. And so while some poor sap was penning Xi’s carefully crafted speech to the UN, Xi and his underlings were busy. Busy financing and building out what is likely to be the worlds most impressive global energy infrastructure.

But they are not only investing in their backyard. Nope… according to a Boston University database they have made more than $244 billion in energy investments abroad since 2000 with the bulk of that in recent years going into oil and gas. 

(Yeah not wind, solar or renewable and recyclable Unicorn farts. Good ol O&G…)

https://capitalistexploits.at/how-china-is-capturing-global-energy-market-share/

[AWW]

Yep London and suburbs are choked with traffic and have been since yesterday afternoon. I've never seen anything like it.

[AWW]

I suppose that's what happens when you tell people that they'll die if they use public transport.

[The Idiocrat]

5 minutes ago, AWW said:

Yep London and suburbs are choked with traffic and have been since yesterday afternoon. I've never seen anything like it.

Isn't it a bit like what happened in Paris with their 70km gridlock the night before lockdown and a lot of people are simply fleeing to the country to make lockdown more bearable?

[AWW]

I don't think so. It's quite common for Parisians to have country homes, but quite rare in London, outside the mega rich.

[Barnsey]

Well there we have it, furlough extension to March (£20bn minimum)

[Bobthebuilder]

31 minutes ago, AWW said:

Yep London and suburbs are choked with traffic and have been since yesterday afternoon. I've never seen anything like it.

Yesterday was busy, A2 down to one lane in Kent so SE London chaos last 2 weeks. Drove into Canary Wharf this morning, much lighter traffic compared, i would say 80% down.

[AWW]

"Working from home" is quite the misnomer. Might be alright if you've got a massive pad with an office, but for most people it means laptop on the couch while trying to get a minutes peace from the kids!

[Boon]

Seems to me to be a half-hearted lockdown.

Shops are closed, but McDonalds/KFC are still open? 

I'm going out for a walk later in the name of 'exercise'....

Personally I think the novelty of lockdown has worn off compared to the first time. 

[Democorruptcy]

5 minutes ago, Boon said:

Seems to me to be a half-hearted lockdown.

Shops are closed, but McDonalds/KFC are still open? 

I'm going out for a walk later in the name of 'exercise'....

Personally I think the novelty of lockdown has worn off compared to the first time. 

It's just an excuse to get more money out there.

In the debate the other day Sir Keir Rammer was suggesting ending the lockdown on Dec 2nd might be too early and it needed extending. Boris replied there would be no need because the R rate is barely over 1 already.

 

[kibuc]

Two quick takes on the go:

Great Panther reports spectatular 3Q financials, not only posting record revenues, record cash flow, record literaly everything, but also coming up with massively reduced AISC, $200/oz lower than ytd average anf the same amount down yoy. Fantastic numbers. 

First Majestic with record earnings and cash flow too, obviously, but what's impressive is that they delivered it against average sale price of $22.5 per punce of silver. Average spot fpr the quarter was $24.5/oz. Haven't read the full report yet so dunno why they sold their silver so cheaply, but early there's a lof of upside of they star achieving spot prices. 

[Boon]

I agree. Personally I think the lockdown is just covering up stuff. The R rate IMO can be attributed to stuff like students going back to uni and Eat out to Help out.

Neither are catalysts this time around, so I think even if there was no lockdown the R rate would continue to fall. 

I think protecting Christmas might be it. If by chance stuff continued to get worse, I don't think a lockdown order would be obeyed by many over Christmas and also unpopular and hard to enforce. So best to get it out of the way now.

The furlough stuff pretty much kicks the can down the road. It's obvious there is going to be a lot of job losses when it ends, if nothing material has changed by March you can easily see it being extended again or replaced with something else different in name but similar in nature. Amazing to think that paying loads of peoples wages is not actually a large figure nowadays relative to the amounts of money being printed.

[kibuc]

Bitcoin doing great recently, tapping on 15k.

I'm hoping to pick up a solid amount of it after the bust if it goes down to 2k-3k range. 

[Democorruptcy]

3 hours ago, Yellow_Reduced_Sticker said:

 

WRONG!

 

They have INCREASED it by a mere...£50bn!

 

The decision was voted through unanimously by the 9-person MPC.

 

"Bank of England to pump another £150bn into UK economy"

https://uk.finance.yahoo.com/news/coronavirus-uk-interest-rates-bank-of-england-november-mpc-meeting-070710497.html

 

As the theme of this thread...Music to our ear-holes!

Is it the right sort of QE though? Doesn't sound like pumping money into infrastructure, more into benefits and consumer spending. I don't see how it helps anyone on here wanting a cheaper house? FT:

 

Quote

 

Bank of England launches £150bn stimulus to boost consumer spending

The Bank of England voted to purchase another £150bn of government bonds on Thursday in a bid to boost spending in the economy as England enters a second coronavirus lockdown.

The MPC said the action taken was in response to “signs that consumer spending has softened across a range of high-frequency indicators, while investment intentions have remained weak”.

Part of the way the MPC intends to encourage businesses to invest and households to spend is to commit to keeping interest rates at rock-bottom until “there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2 per cent inflation target sustainably”. With CPI inflation at 0.7 per cent in September, it is expected to remain well below the BoE’s 2 per cent target through 2021 and only meet the conditions set by the committee for raising rates late in 2023 at the earliest.

 

 

 

[Barnsey]

1 hour ago, Boon said:

The furlough stuff pretty much kicks the can down the road. It's obvious there is going to be a lot of job losses when it ends, if nothing material has changed by March you can easily see it being extended again or replaced with something else different in name but similar in nature. Amazing to think that paying loads of peoples wages is not actually a large figure nowadays relative to the amounts of money being printed.

Mass unemployment during this modern era of "I want it now" personal debt is inherently deflationary, hence ever closer cooperation between Sunak and Bailey. Like you say, I think this will continue in some form indefinitely aka permanent "kurzarbeit" facility.

The lines of fiscal responsibility are getting very blurred, and whilst I certainly don't deny the strong possibility of a bust next year, I've been continuously surprised at the extent and rapidity of the magic M-M-Tree. Combine this with the quite dramatic capacity cuts and I'm thinking we might see inflation sooner than 2022-3.

Conclusion, I might have to lower my expectations for any serious housing bust next year given the willingness to prop everything up, aim for perhaps 10-15% off in the midst of this dark winter, with importance shifting to getting the lowest and longest fixed rate possible while we're in this nadir. Also starting to think as soon as there's a hint of inflation this could boost the housing market in the medium term in a dash for "real" assets and pull forward demand too.

[Barnsey]

Helicopter money in disguise?

[Boon]

Not quite yet, I guess there may be a time when the non-furloughed kick up a fuss and want their slice of the pie. 

Been looking at topping up the oilies today, but with a Biden administration looking likely, would people think the tax implications are bearish? 

[janch]

Read somewhere it'll be infrastructure all the way in the US if either Biden or Trump win and these 2 companies have been mentioned as being likely winners:

Ashtead AHT and Ferguson FERG.  Ashtead are for industrial equipment hire and Ferguson are plumbing and heating supplier.  Both shares are motoring at the moment and are big in the US apparently.

When I get some spare cash I think I may get some so I can have one or two shares which aren't always red

[Barnsey]

18 minutes ago, Cattle Prod said:

I think so, Barnsey. And I agree with Kevin Peachy there, I haven't got a bleeding penny! As a libertarian, I'll never want free money from the government. What I do want is a tax rebate to the amount that everyone is getting for free. And if they don't give it to me, I'll soon give it to myself by withdrawing my labour and taxes thereby.

Last tweet for today

 

[Democorruptcy]

48 minutes ago, Barnsey said:

Conclusion, I might have to lower my expectations for any serious housing bust next year given the willingness to prop everything up, aim for perhaps 10-15% off in the midst of this dark winter, with importance shifting to getting the lowest and longest fixed rate possible while we're in this nadir. Also starting to think as soon as there's a hint of inflation this could boost the housing market in the medium term in a dash for "real" assets and pull forward demand too.

I remember there was one you were tempted by early covid but you thought there would be a dip this Autumn? I suggested a discount then was real. Did you not offer or try but get knocked back. I suppose finding a distressed seller in Autumn would help. Their handling of it is textbook support prices at all costs, even now we have a so called killer plague but the housing market is open as normal, so buyers can step over the dead bodies and still complete before Christmas!

[Yellow_Reduced_Sticker]

Cor blimey gold ROCKETING...UP ...$50 as i post!

meanwhile Rolls-Royce DOWN 11% today ...well i never!